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KYCO: Know Your Company

Reveal Profile

2 February 2026

1) Overview of the Company

The Federal National Mortgage Association, commonly known as Fannie Mae, is a government-sponsored enterprise that operates as a publicly traded company under Federal Housing Finance Agency conservatorship since September 2008. Founded in 1938 during the Great Depression as part of the New Deal, Fannie Mae is chartered by Congress to provide liquidity and stability to the U.S. housing market and promote access to mortgage credit. The company is headquartered in Washington, D.C., and trades on the OTCQB under ticker symbol FNMA.

Fannie Mae operates as a leading source of financing for residential mortgages in the United States, with over $4.3 trillion in total assets as of December 31, 2024, making it the largest company in the United States and fifth largest globally by assets. The company maintains a $4.1 trillion guaranty book of business and employed approximately 8,100 people as of December 2023. In 2024, Fannie Mae generated $29.1 billion in revenues and reported net income of $17.0 billion, bringing the company’s net worth to $94.7 billion.

The company’s business model centers on purchasing residential mortgage loans from lenders and securitizing them into guaranteed mortgage-backed securities sold to global investors, while providing guaranty fees as its primary revenue source. Fannie Mae operates through two main business segments: Single-Family, which finances properties with four or fewer residential units, and Multifamily, which finances residential buildings with five or more units. As of June 30, 2025, Fannie Mae owned or guaranteed an estimated 25% of single-family mortgage debt outstanding and 21% of multifamily mortgage debt outstanding in the United States.

During October 2025, the company implemented significant executive leadership changes with Peter Akwaboah being appointed Acting CEO upon Priscilla Almodovar’s departure, while John Roscoe and Brandon Hamara were promoted to Co-Presidents, pending FHFA approval. The company’s operations remain under conservatorship, with the Federal Housing Finance Agency serving as conservator and the FHFA Director serving as Chairman of the Board since March 2025. Fannie Mae’s agreements with the U.S. Department of Treasury significantly restrict business activities and stockholder rights while the company continues building regulatory capital toward meeting Enterprise Regulatory Capital Framework requirements.

2) History

Fannie Mae’s origins trace back to 1938 when Congress created the Federal National Mortgage Association during the Great Depression as part of President Franklin D. Roosevelt’s New Deal. The company was established as a federal government agency with the mission to provide liquidity, stability, and affordability in the mortgage market at a time when nearly a quarter of the nation’s homeowners had lost their homes to foreclosure and banks lacked funds for mortgage lending.

Initially, Fannie Mae operated as a simple, federally-owned mortgage dealer authorized only to purchase mortgages insured by the Federal Housing Administration, later expanding to include Veterans Administration mortgages. In 1954, Congress reorganized the company through the Charter Act, enabling Fannie Mae to use private funds alongside federal funding by selling shares and bonds while exempting the company from state and local taxes except property taxes. This restructuring lifted financing constraints imposed by annual Congressional budgeting, leading to exponential growth year after year.

A transformational reorganization occurred in 1968 when Congress converted Fannie Mae into a government-sponsored enterprise through the Housing and Urban Development Act. This change split the company, with the privately-funded portion becoming a shareholder-owned corporation while the smaller federally-funded operations were spun off into the Government National Mortgage Association. The 1968 restructuring enabled Fannie Mae to issue mortgage-backed securities and removed the company’s debt from federal balance sheets, while the President retained authority to appoint five of the eighteen board directors.

In 1970, Congress granted Fannie Mae additional powers through the Emergency Home Finance Act, authorizing the company to purchase conventional mortgages beyond FHA and VA loans and enabling dealings in subordinate lien mortgages. This expansion significantly broadened the company’s market reach and established the foundation for the modern secondary mortgage market structure that enabled mortgage capital to be limited only by public trading market appetite.

The company began issuing mortgage-backed securities in the 1980s, bringing capital from global markets to the U.S. housing industry. During this period, Fannie Mae securitized mortgage loans and provided payment guarantees to investors, creating the framework for the company’s current business model. The development of mortgage-backed securities represented a critical evolution that transformed how mortgage financing operated in the United States.

The 2008 financial crisis marked another pivotal moment in Fannie Mae’s history when housing prices plummeted and delinquencies rose, causing the government-sponsored enterprises to lose billions of dollars on investment portfolios and mortgage-backed security guarantees. On September 6, 2008, the Federal Housing Finance Agency placed Fannie Mae under conservatorship, with the federal government taking control of operations. Since conservatorship began, the company has received over $150 billion in taxpayer support, representing the largest bailout of the financial crisis.

The company returned to profitability in 2012, and by 2014, Fannie Mae had repaid all funds received during the initial conservatorship period while contributing billions of dollars to the U.S. Treasury. Throughout the conservatorship period, Fannie Mae has continued operating under Federal Housing Finance Agency oversight while building regulatory capital and serving the mortgage market. The company’s strategic planning efforts have evolved from fundamental rebuilding during the early conservatorship years to comprehensive growth strategies aimed at deepening market penetration and expanding business opportunities within its Congressional charter.

3) Key Executives

Peter Akwaboah currently serves as Acting Chief Executive Officer and Chief Operating Officer of Fannie Mae, having been appointed to the dual role in October 2025. Akwaboah brings more than 30 years of financial services leadership experience in operations, technology, and innovation at Morgan Stanley, Royal Bank of Scotland, Deutsche Bank, KPMG, and IBM. Previously, he served as Executive Vice President and Chief Operating Officer since May 2024, with responsibility for Fannie Mae’s Chief Information Office, Enterprise Operations, Business Resiliency, and Enterprise Workplace and Security functions. Prior to joining Fannie Mae, Akwaboah was a Managing Director and Chief Operating Officer for Technology and Head of Innovation at Morgan Stanley, where he drove technology strategy to fuel the firm’s innovation, effectiveness, and resilience. He holds multiple degrees in engineering and civil engineering, including a first-class honors Bachelor of Engineering from the University of Birmingham, England.

Chryssa C. Halley serves as Executive Vice President and Chief Financial Officer, reporting to the President and Chief Executive Officer with responsibility for Fannie Mae’s financial management, enterprise modeling and enterprise strategic planning. Halley was appointed to the CFO role in November 2021, having previously served as Fannie Mae’s Senior Vice President and Controller. Since joining Fannie Mae in 2006, she has held various positions including Senior Vice President and Deputy Controller; Vice President and Assistant Controller for Capital Markets and Operations; Vice President for Tax, Debt and Derivatives, and Securities Accounting; and Vice President for Corporate Tax. Before joining Fannie Mae, Halley was a Director of Accounting for the Federal Agricultural Mortgage Corporation and Senior Director, Debt and Derivative Reporting at Freddie Mac. She is a licensed certified public accountant in Maryland and holds a Bachelor of Arts in economics from St. Mary’s College of Maryland.

John Roscoe serves as Co-President of Fannie Mae, appointed to this role in October 2025 with responsibility for driving enterprise-wide focus on core business and organizational efficiency. Previously, Roscoe served as Fannie Mae Executive Vice President, Operations and Public Relations. Prior to joining Fannie Mae, he was Principal and CEO of North Star Navigators, where he advised senior executives on commercial strategy and regulatory policy. Roscoe served as Chief of Staff at the Federal Housing Finance Agency, overseeing operations at an agency with over 700 employees while managing high-level initiatives and engagement with mortgage market companies, industry stakeholders, and federal agencies. He previously served at The White House as Special Assistant to the President, leading the executive search and selection process for top financial, housing, and regulatory appointments. Roscoe holds a Bachelor of Arts in Political Science with Honors from Ohio State University and has studied at Oxford University in England.

Brandon Hamara serves as Co-President of Fannie Mae and board member, appointed to both roles in 2025 with responsibility for leading the development and execution of the strategic plan for the organization, focused on driving innovation and organizational performance. Hamara brings expertise in real estate, homebuilding, land development, and housing finance, having spent nearly two decades in the homebuilding industry. He previously served on the Board of Directors at Freddie Mac since March 2025, where he chaired the Risk Committee and was a member of the Audit and Executive Committees. For nearly a decade, Hamara was lead adjunct instructor and facilitator in Santa Barbara City College’s real estate department, teaching real estate and finance courses. He holds a Bachelor of Arts degree from the University of California, Santa Barbara, and a Master of Real Estate Development degree from the University of Southern California.

Erik Bisso serves as Executive Vice President, Chief Investment Officer, and Head of Treasury and Capital Markets, leading the firm’s investment strategy, treasury operations, and single-family and multifamily capital markets activities. Bisso provides strategic direction for the balance sheet, overseeing liquidity, financing, credit risk transfer, and derivative activities as well as Fannie Mae’s portfolio of mortgage securities and loan investments. Before joining Fannie Mae, he served as Global Head of J.P. Morgan’s Investment Portfolio, where he managed the firm’s structural interest rate risk and deployed excess liquidity across global fixed income markets. Bisso joined J.P. Morgan in 2006 in the Markets division, became Head of Agency Mortgage Pass-Through Trading in 2008, and transitioned to the Chief Investment Office in 2013 as North American CIO. He holds a B.S. in Business Administration from the University of Richmond and is a CFA charterholder.

Anthony Moon serves as Executive Vice President and Chief Risk Officer, responsible for enterprise risk management across Fannie Mae’s operations. Michael McCarthy serves as Senior Vice President and General Counsel, overseeing the company’s legal affairs and compliance functions. Jason Dandridge serves as Senior Vice President, Chief Control Officer & Head of Enterprise Operations, overseeing enterprise capabilities including enterprise Operations, First-Line Risk for the Chief Operating Office, Enterprise Resiliency and Crisis Management. Prior to joining Fannie Mae in 2021, Dandridge was a Managing Director at Morgan Stanley, serving in multiple roles including Deputy Head of Technology and Operations Risk. Kelly Follain serves as Executive Vice President and Head of Multifamily, leading Fannie Mae’s multifamily housing finance operations. Jake Williamson serves as Executive Vice President and Head of Single-Family, overseeing the company’s single-family mortgage business.

4) Ownership

Fannie Mae operates as a government-sponsored enterprise with a complex ownership structure defined by its ongoing conservatorship status since September 2008. The Federal Housing Finance Agency serves as conservator and holds ultimate authority over all operations, having succeeded to all shareholder rights and powers when conservatorship was established. During conservatorship, the company’s Board of Directors has no fiduciary duties to stockholders, as they owe their duties solely to FHFA as conservator.

The U.S. Department of Treasury holds the dominant economic interest in Fannie Mae through senior preferred stock with a liquidation preference of $212.0 billion as of December 31, 2024, representing the cumulative amount of financial support provided since 2008. Treasury also holds warrants to purchase 79.9% of Fannie Mae’s common stock at an exercise price of $0.00001 per share, with a twenty-year duration from the original September 2008 agreement. These warrants provide Treasury with substantial control over the company’s future ownership structure upon any exit from conservatorship.

Public shareholders retain subordinated ownership interests through multiple classes of securities, despite their significantly limited economic rights under conservatorship. Common stockholders hold 1.2 billion shares outstanding as of December 31, 2024, with approximately 150.7 million shares held as treasury stock. The company has issued 556 million shares of various series of non-cumulative preferred stock with stated values ranging from $25 to $100,000 per share across fifteen different series. These preferred shares rank junior to Treasury’s senior preferred stock but senior to common stock for both dividends and liquidation distributions.

Institutional ownership in Fannie Mae’s publicly traded securities remains limited, with approximately 41 institutional investors holding a total of 27.5 million shares as of recent filings. Notable institutional positions include holdings by Pershing Square Capital Management at approximately 10% of outstanding common shares, representing one of the largest known institutional stakes. Additional institutional holders include various mutual funds and investment advisors, though most maintain relatively small positions given the uncertainties surrounding conservatorship and future ownership structure.

The conservatorship agreements significantly restrict normal stockholder rights and corporate governance functions. Under the current profit sweep arrangement, substantially all of Fannie Mae’s earnings above a minimal capital buffer flow to Treasury as dividend payments, preventing the accumulation of retained earnings that would typically build shareholder equity. However, amendments to the Senior Preferred Stock Purchase Agreements in January 2025 established a framework for potential future capital retention and eventual exit from conservatorship, though no specific timeline has been announced.

5) Financial Position

Fannie Mae operates as a publicly traded company under the ticker symbol FNMA on the OTC Bulletin Board, with shares trading at $8.45 as of February 2, 2026. The company’s stock price has experienced significant volatility over the past year, reaching a 52-week high of $15.99 in September 2025 and a 52-week low of $4.83 in April 2025, representing a current trading range that reflects ongoing uncertainty about the company’s future under conservatorship. Despite recent price volatility with a 21.25% year-to-date decline through February 2026, Fannie Mae’s stock has delivered substantial long-term returns with a 63.76% gain over the past year.

The company maintains a market capitalization of approximately $9.48 billion with 1.16 billion shares in public float, though trading occurs with limited liquidity compared to major exchange-listed companies. Analyst coverage remains limited with only five analysts providing recommendations, resulting in an average price target of $14.60 that represents significant upside from current trading levels. The consensus rating among analysts is “Overweight” with three buy ratings, one hold rating, and one sell rating.

Fannie Mae’s financial performance demonstrates strong profitability trends with net income of $17.0 billion for 2024, compared to $17.4 billion in 2023, representing a modest 2.47% year-over-year decline. Revenue growth has remained robust, increasing from $141.24 billion in 2023 to $152.67 billion in 2024, marking an 8.09% annual increase. The company’s revenue trajectory shows consistent growth over the five-year period, with revenue expanding from $101.54 billion in 2021 to current levels, reflecting sustained business expansion despite conservatorship constraints.

The company’s profitability metrics reveal strong operational efficiency with net margins of 11.21% in 2024 and return on assets of 0.39%. Fannie Mae’s efficiency ratio improved to 31.7% in 2024 from 33.0% in 2023, indicating enhanced operational cost management. The company’s earnings per share remains effectively zero due to the profit sweep arrangement with Treasury, though the underlying business generates substantial cash flows that flow to the government rather than common shareholders.

Fannie Mae’s balance sheet reflects massive scale with total assets of $4.35 trillion as of December 31, 2024, making it the largest company in the United States by assets. The company’s asset composition includes $4.14 trillion in mortgage loans net of allowances, $79.2 billion in investment securities, and $38.9 billion in cash and equivalents. Total liabilities stand at $4.26 trillion, primarily consisting of $4.09 trillion in consolidated trust debt and $139.4 billion in Fannie Mae debt.

The company’s capital position shows net worth growth to $94.7 billion as of December 31, 2024, from $77.7 billion in 2023, representing a 21.8% increase driven by retained earnings. However, Fannie Mae faces a regulatory capital deficit of approximately $146 billion relative to minimum total risk-based capital requirements under the Enterprise Regulatory Capital Framework, primarily because the $120.8 billion in senior preferred stock held by Treasury does not qualify as regulatory capital. The company has built $37 billion in available regulatory capital over the past two years while working toward meeting full capital requirements.

Fannie Mae’s liquidity position remains robust with a corporate liquidity portfolio of $132.4 billion as of December 31, 2024, compared to $114.3 billion in the prior year. The company’s debt portfolio decreased to $139.4 billion in 2024 as funding needs were primarily satisfied through retained earnings rather than external debt issuance. Interest rate risk management shows effective duration gap of 0.01 years as of November 2024, indicating well-hedged exposure to interest rate movements.

The company’s credit quality metrics demonstrate strong risk management with single-family serious delinquency rates of 0.56% as of December 2024 and multifamily serious delinquency rates of 0.57%. Credit loss reserves total $7.73 billion, representing 0.15% of the single-family guaranty book and 0.48% of the multifamily guaranty book. The weighted-average mark-to-market loan-to-value ratio for the single-family conventional guaranty book stands at 50% with a weighted-average FICO credit score of 753.

Revenue composition reflects the company’s transformation to a guaranty-driven business model, with base guaranty fee income generating $16.5 billion in 2024 compared to $3.3 billion from net interest income on portfolios. The single-family business contributed $24.4 billion in revenues with an average charged guaranty fee of 47.6 basis points, while the multifamily business generated $4.7 billion with an average charged guaranty fee of 74.4 basis points. This fee-based revenue structure provides more stable income streams compared to the pre-crisis investment portfolio model.

6) Market Position

Fannie Mae operates as the dominant player in the U.S. secondary mortgage market, maintaining a commanding position across both single-family and multifamily segments while facing evolving competitive dynamics and market challenges. The company holds an estimated 25% of single-family mortgage debt outstanding and 21% of multifamily mortgage debt outstanding in the United States as of June 2025, representing approximately one in four mortgage loans nationwide. This market dominance stems from Fannie Mae’s unique government-sponsored enterprise status and its role as a critical liquidity provider to thousands of mortgage lenders across the country.

The competitive landscape reveals Fannie Mae’s position within a concentrated market structure where government-sponsored enterprises collectively support approximately 70% of the mortgage market. Fannie Mae competes directly with Freddie Mac in the conforming loan market, with both entities maintaining similar market shares in the agency mortgage-backed securities market, representing 39.6% and 33.0% respectively of the $9.1 trillion agency MBS market as of August 2024. Ginnie Mae constitutes the third major competitor at 27.4% market share, though it operates in the government-insured loan segment rather than conventional mortgages. A notable competitive development occurred in 2024 when Freddie Mac surpassed Fannie Mae in single-family mortgage deliveries for the first time since 1991, acquiring $340.34 billion compared to Fannie Mae’s $328.72 billion.

Customer concentration and distribution channels demonstrate Fannie Mae’s broad market reach through its extensive lender network encompassing approximately 1,800 approved lenders who utilize the company’s Desktop Underwriter system. The company’s single-family business serves lenders of all sizes, from large national banks to small community lenders and credit unions, while the multifamily business operates through a specialized network of 24 Delegated Underwriting and Servicing lenders plus four specialty lenders. In 2024, Fannie Mae’s top 10 multifamily DUS lenders included Walker & Dunlop ($7.04 billion), Berkadia Commercial Mortgage ($6.25 billion), and CBRE Multifamily Capital ($6.17 billion), demonstrating concentrated relationships with major commercial real estate finance firms.

Fannie Mae’s strategic positioning emphasizes its role in market stabilization and countercyclical support, particularly during economic stress periods. The Financial Stability Oversight Council recognizes that Fannie Mae and Freddie Mac acquire nearly 50% of newly originated mortgages in both single-family and multifamily markets, creating significant interconnectedness among financial institutions. This position enables the company to provide liquidity when private capital markets withdraw, as demonstrated during the 2008 financial crisis and COVID-19 pandemic, but also creates systemic risk that requires robust regulatory oversight.

Operational capabilities reflect Fannie Mae’s massive scale and technological sophistication, with the company maintaining a master servicing portfolio of $470.9 billion and special servicing portfolio of $10.0 billion as of December 2023. The company operates primary servicing locations in Washington, D.C., and Plano, Texas, utilizing the McCracken Strategy loan servicing system to manage operations. Technology infrastructure includes comprehensive data analytics capabilities processing over 4 petabytes of business data through its data mesh architecture and advanced cloud computing platforms that enable real-time risk assessment and decision-making.

Brand recognition and market influence stem from Fannie Mae’s 87-year operating history and its central role in establishing industry standards through its Selling Guide underwriting requirements and Desktop Underwriter system. The company’s market position benefits from regulatory advantages including exemption from state and local taxes, SEC registration requirements, and access to Federal Reserve open market operations. However, the ongoing conservatorship status since 2008 creates uncertainty about future market structure and competitive dynamics, particularly regarding potential privatization discussions and evolving regulatory frameworks under the Enterprise Regulatory Capital Framework.

7) Legal Claims and Actions

Fannie Mae and Freddie Mac shareholders achieved a significant legal victory in 2024 when a federal jury awarded $612 million in damages against the Federal Housing Finance Agency. The jury found that FHFA breached the implied covenant of good faith and fair dealing when it implemented the “Net Worth Sweep” in 2012, which directed all company profits to the U.S. Treasury rather than allowing capital accumulation. A federal judge upheld this verdict in March 2025, representing one of the largest shareholder recoveries in the enterprises’ litigation history.

The company faces multiple employment-related lawsuits stemming from mass terminations in 2025. In April 2025, Fannie Mae terminated over 100 employees for what it described as “unethical conduct, including the facilitation of fraud” related to the company’s charitable gift-matching program. Former employees subsequently filed discrimination lawsuits alleging age and nationality-based bias, with plaintiffs claiming they were predominantly of Indian national origin and over age 50. Additional defamation claims were filed against former CEO Priscilla Almodovar and FHFA Director Bill Pulte, seeking over $82 million in damages for public statements suggesting the terminated employees received “kickbacks.”

Congressional inquiries have emerged regarding Fannie Mae’s employment practices. In April 2025, three U.S. Congressmen launched an investigation into the mass firings, demanding evidence and questioning whether employees were targeted based on national origin. Representative Suhas Subramanyam specifically raised concerns about the lack of individual investigations prior to the terminations and the potential for discriminatory practices.

The company has initiated legal action against several home warranty firms, filing a federal lawsuit accusing them of misusing the Fannie Mae name and trademark in marketing materials sent to borrowers. This trademark enforcement action demonstrates the company’s efforts to protect its brand and prevent consumer confusion in the marketplace.

Given Fannie Mae’s status as a government-sponsored enterprise operating under conservatorship, many regulatory matters are handled through direct FHFA supervision rather than formal enforcement proceedings. The conservatorship structure places the company under comprehensive federal oversight, with potential compliance issues typically addressed through supervisory action rather than public legal proceedings.

8) Recent Media Coverage

Fannie Mae experienced significant leadership and governance turmoil throughout 2025, which attracted extensive media coverage. In October 2025, President and CEO Priscilla Almodovar abruptly departed, with COO Peter Akwaboah appointed as Acting CEO. Reports from November 2025 alleged that Almodovar and other senior executives, including the general counsel, were forced out after internally investigating and raising concerns about Federal Housing Finance Agency Director Bill Pulte. The concerns reportedly involved the sharing of confidential mortgage pricing data with competitor Freddie Mac at Pulte’s direction. This followed a major board overhaul in March 2025, when Pulte, upon his confirmation as FHFA Director, fired 14 board members, named himself chairman of both Fannie Mae and Freddie Mac, and appointed new members. Adding to the instability, one of Pulte’s board appointees, Christopher Stanley, resigned just one day after his appointment in March 2025.

The company faced multiple employment-related controversies and lawsuits in 2025. In April 2025, Fannie Mae terminated over 100 employees for what it termed “unethical conduct, including facilitating fraud,” related to its charitable gift-matching program. This led to lawsuits filed in July and August 2025 by dozens of the fired employees, who are predominantly of Indian national origin and over the age of 50, alleging age and nationality-based discrimination. The former employees also filed defamation lawsuits against the company, then-CEO Priscilla Almodovar, and FHFA Director Bill Pulte, seeking over $82 million in damages for public statements Pulte made suggesting the employees received “kickbacks.” The firings prompted an inquiry from three U.S. Congressmen in April 2025, who demanded evidence and questioned whether the employees were targeted based on their national origin. Further staff reductions occurred in October 2025, when 62 employees were laid off from the COO, information technology, and DEI divisions; some reports indicated the cuts included staff from the ethics and internal investigations unit. This followed a report from April 2025 that Fannie Mae’s entire environmental, social, and governance team had been terminated as part of a broader strategic shift away from such initiatives under the new leadership.

Media reports in 2023 and 2024 highlighted Fannie Mae’s efforts to manage fraud and cybersecurity risks. In its Q3 2024 earnings report, Fannie Mae disclosed it had experienced financial losses from mortgage fraud and was investigating potential fraud in its multifamily lending transactions, noting it had identified “gaps” in its loan origination fraud risk management processes. In response, Fannie Mae announced a partnership with data analytics firm Palantir in May 2025 to deploy artificial intelligence technology to proactively detect mortgage fraud. Separately, in November 2023, the company announced that a cybersecurity incident at one of its servicers, Mr. Cooper, resulted in a failure to receive certain loan activity reporting, which delayed scheduled distributions to mortgage-backed securities certificateholders.

In early 2026, the Trump administration directed Fannie Mae and Freddie Mac to purchase $200 billion in MBS to lower mortgage rates, a move analysts noted could increase the enterprises’ risk exposure. Following the directive, the FHFA quietly raised the cap on agency MBS each enterprise could hold from $40 billion to $225 billion, a move that reversed nearly two decades of policy aimed at limiting their investment portfolios post-2008 bailout. In other business developments, Fifth Third Bancorp announced in December 2025 that it would acquire Mechanics Bank’s Fannie Mae Delegated Underwriting and Servicing business line. During 2023, Fannie Mae also initiated a federal lawsuit against several home warranty firms, accusing them of misusing the Fannie Mae name and trademark in marketing materials sent to borrowers.

Shareholder litigation related to the company’s 2008 conservatorship reached a significant milestone in August 2023, when a federal jury awarded Fannie Mae and Freddie Mac shareholders $612.4 million in damages. The jury found that the FHFA breached the implied covenant of good faith and fair dealing when it amended the terms of its stock purchase agreement in 2012 to sweep all company profits to the U.S. Treasury, a move known as the “Net Worth Sweep.” A judge upheld the jury’s verdict in March 2025. Amidst these legal and governance events, Fannie Mae reported strong financial results, including a net income of $3.9 billion for the third quarter of 2025, which increased its net worth to over $105 billion.

9) Strengths

Dominant Market Position and Scale

Fannie Mae maintains an unparalleled position in the U.S. mortgage market as the largest company in the United States by assets, with over $4.3 trillion in total assets and a $4.1 trillion guaranty book of business. The company owns or guarantees an estimated 25% of single-family mortgage debt outstanding and 21% of multifamily mortgage debt outstanding in the United States, representing approximately one in four mortgage loans nationwide. This massive scale enables the company to provide consistent liquidity to thousands of mortgage lenders across the country while maintaining competitive pricing and execution capabilities that smaller competitors cannot match.

Government-Sponsored Enterprise Status

The company’s unique government-sponsored enterprise charter provides substantial competitive advantages through implicit government backing that enables borrowing at rates significantly lower than private entities. This government sponsorship allows Fannie Mae to offer mortgage rates that can be approximately 0.5% lower than private competitors, making homeownership more accessible to millions of Americans. The GSE status also provides regulatory advantages including exemption from state and local taxes, SEC registration requirements, and access to Federal Reserve open market operations.

Advanced Technology Platform and Innovation Leadership

Fannie Mae operates the industry’s most widely used automated underwriting system, Desktop Underwriter, which is utilized by approximately 1,800 lenders and evaluates over 96% of loans sold to the company. The company has invested heavily in cloud modernization and artificial intelligence capabilities, achieving 68% cloud adoption as of 2022 with targets to reach 73-83% by December 2022. Recent technological innovations include the September 2021 launch of positive rent payment history features in Desktop Underwriter and the May 2025 partnership with Palantir to deploy AI-powered fraud detection technology.

Comprehensive Risk Management Framework

The company demonstrates sophisticated risk management capabilities through its industry-standard “three lines of defense” structure and comprehensive enterprise risk management program aligned with FHFA requirements and COSO frameworks. Fannie Mae has drastically improved its risk position since the 2008 financial crisis, with eligibility defect rates declining from 5.875% during the crisis peak to 1.049% currently, while maintaining serious delinquency rates below 0.7% compared to over 5% during the crisis. The company’s credit risk transfer programs have successfully transferred a portion of credit risk on over $2.1 trillion in single-family residential loans to private investors.

Market-Leading Credit Risk Transfer Innovation

Fannie Mae operates pioneering credit risk transfer programs including Connecticut Avenue Securities and Credit Insurance Risk Transfer that have transferred mortgage credit risk on approximately one-third of the company’s single-family conventional guaranty book of business. Since program inception, the company has transferred to private investors a portion of credit risk on $1.3 trillion of single-family loans, representing 32% of loans in the single-family conventional guaranty book as of 2017. These programs reduce systemic risk, protect taxpayers from credit-related losses, and promote market stability by distributing credit risk across the global financial system.

Strong Financial Performance and Profitability

The company demonstrates consistent profitability with net income of $17.0 billion for 2024 and $3.9 billion for the third quarter of 2025, while maintaining strong efficiency ratios of 31.7% in 2024. Revenue growth has remained robust, increasing from $141.24 billion in 2023 to $152.67 billion in 2024, marking an 8.09% annual increase driven by the fee-based guaranty business model. The company’s net worth has grown substantially to $105.5 billion as of September 2025, representing a $10.8 billion increase during the first nine months of 2025.

Established Industry Standards and Brand Recognition

Fannie Mae’s 87-year operating history and central role in establishing industry standards through its Selling Guide underwriting requirements and Desktop Underwriter system create substantial brand recognition and market influence. The company’s mortgage-backed securities are recognized globally, with Fannie Mae representing 39.6% of the $9.1 trillion agency MBS market as of August 2024. The company’s underwriting guidelines set industry standards that promote consistency and efficiency in lending practices across thousands of lenders.

Extensive Lender Network and Distribution Capabilities

The company maintains relationships with approximately 1,800 approved single-family lenders and operates through a specialized network of 25 multifamily Delegated Underwriting and Servicing lenders, providing comprehensive market coverage across all segments. This extensive distribution network enables Fannie Mae to serve lenders of all sizes, from large national banks to small community lenders and credit unions, while maintaining consistent underwriting standards and execution capabilities.

Intellectual Property Portfolio and Innovation Capabilities

Fannie Mae holds 214 patents globally across various housing finance and technology applications, with 120 active patents demonstrating the company’s commitment to innovation. The company’s patents include systems and methods for mortgage loan customization, automated valuation models, risk assessment tools, and electronic document processing that provide competitive advantages and barriers to entry for competitors.

Countercyclical Market Support and Liquidity Provision

The company’s mission as a government-sponsored enterprise positions it to provide critical countercyclical support during economic stress periods when private capital markets withdraw from mortgage lending. This capability was demonstrated during the 2008 financial crisis and COVID-19 pandemic, when Fannie Mae expanded its multifamily activity and provided essential liquidity to maintain market stability. The Financial Stability Oversight Council recognizes this countercyclical role as essential to the functioning of the U.S. housing finance system.

10) Potential Risk Areas for Further Diligence

Leadership Instability and Governance Disruption Risk

Fannie Mae faces significant leadership stability concerns following unprecedented executive turnover in 2025, including the abrupt departure of CEO Priscilla Almodovar and widespread board restructuring under FHFA Director Bill Pulte. The company has experienced substantial organizational disruption with over 100 employees terminated in April 2025 for alleged fraud, 62 additional layoffs in October 2025, and the elimination of entire departments including ESG teams. This pattern of rapid leadership changes and organizational restructuring creates risks around institutional knowledge loss, strategic continuity, and operational effectiveness during a critical period when the company requires stable governance to meet regulatory capital requirements and potential conservatorship exit planning.

Cybersecurity Compliance and Third-Party Risk Management

The company faces heightened cybersecurity risks with the implementation of new Information Security and Business Resiliency Supplement requirements effective August 2025, requiring 36-hour incident reporting and comprehensive security frameworks across approximately 1,800 lender partners. Historical cybersecurity incident reporting deficiencies identified by FHFA’s Office of Inspector General, including inadequate classification and delayed notification of incidents, demonstrate ongoing vulnerabilities in the company’s cybersecurity governance framework. The company’s extensive reliance on third-party vendors and service providers, combined with documented gaps in vendor oversight and due diligence processes, creates additional operational and reputational risks that could compromise data security and regulatory compliance.

Regulatory Capital Deficit and Conservatorship Dependency Risk

Fannie Mae operates with a regulatory capital deficit of approximately $146 billion relative to Enterprise Regulatory Capital Framework requirements, making the company significantly undercapitalized and dependent on ongoing government support. The company’s complex ownership structure under conservatorship creates uncertainty about future business operations, shareholder rights, and potential exit strategies, while profit sweep arrangements prevent capital accumulation needed for regulatory compliance. These capital constraints limit strategic flexibility and create ongoing dependency on federal support that could affect long-term viability and competitiveness.

Fraud Detection and Control Environment Risk

The company disclosed potential fraud in its multifamily lending operations during 2024, resulting in a $752 million provision for loan losses that specifically included expected losses attributed to mortgage fraud. This represents an emerging risk area that required enhanced fraud detection mechanisms and additional training programs to address control weaknesses. The identification of fraud risks in one of the company’s key business lines raises concerns about the adequacy of existing control frameworks and the potential for undetected fraud in other areas of operations.

Employment Litigation and Discrimination Risk

Fannie Mae faces multiple active employment-related lawsuits totaling over $82 million in damages, with former employees alleging age and nationality-based discrimination following mass terminations in 2025. The company also confronts defamation claims related to public statements made by leadership regarding terminated employees, creating reputational and financial exposure. These litigation matters, combined with Congressional inquiries into the company’s employment practices, indicate potential systemic issues in human resources management and legal compliance that could result in significant financial settlements and ongoing regulatory scrutiny.

Operational Risk Management and Internal Controls

FHFA’s Office of Inspector General has repeatedly identified deficiencies in Fannie Mae’s operational risk management program over multiple examination cycles, noting that the company has faced ongoing challenges in establishing effective operational risk controls since at least 2006. Historical examples include inadequate oversight of foreclosure attorney networks and insufficient response to internal reports identifying potential misconduct, suggesting systemic weaknesses in risk identification and remediation processes. The company’s complex technology infrastructure and ongoing cloud migration initiatives create additional operational risks that require careful management to avoid service disruptions and data security incidents.

Conflict of Interest and Corporate Governance Risk

Internal investigations have identified governance concerns involving potential conflicts of interest and sharing of confidential information with competitors, leading to the departure of senior executives who raised these concerns. The company’s governance structure under conservatorship creates unique challenges for conflict resolution and board oversight, as directors owe fiduciary duties solely to FHFA rather than shareholders. These governance complexities, combined with recent leadership instability, create risks around decision-making transparency, accountability, and ethical compliance that could affect regulatory relationships and public trust.

Third-Party Relationship Management Risk

The company’s extensive network of lenders, servicers, and technology providers creates concentration risks and potential vulnerabilities if key relationships are disrupted or if third parties fail to meet their obligations. Documented deficiencies in vendor management processes, including inadequate due diligence and oversight procedures, could result in operational failures, compliance violations, or reputational damage. The company’s reliance on approximately 25 multifamily DUS lenders for a significant portion of its business creates concentration risk if any of these key relationships are terminated or if lenders experience their own operational or financial difficulties.

Model Risk and Stress Testing Vulnerabilities

Fannie Mae’s business model depends heavily on sophisticated risk management models and stress testing frameworks that face inherent limitations in predicting extreme scenarios or tail risks. The company acknowledges that model risk can be mitigated but not eliminated, and that models require numerous assumptions with inherent limitations when estimating macroeconomic factors. Given the company’s massive scale and systemic importance, model failures or inadequate stress testing could result in significant losses and regulatory sanctions, particularly during periods of economic stress or rapid market changes.

Technology Infrastructure and Modernization Risk

The company’s ongoing digital transformation and cloud migration initiatives create implementation risks and potential service disruptions as legacy systems are replaced with modern technology platforms. While the company has achieved 68% cloud adoption as of 2022 with targets to reach higher levels, the complexity of migrating 2,500 applications across multiple technology platforms creates execution risk. Technology failures or cybersecurity incidents could disrupt critical business operations and mortgage market liquidity, given the company’s central role in the U.S. housing finance system.

General Industry Regulatory Environment Risk

Government-sponsored enterprises face ongoing uncertainty about future regulatory frameworks and potential housing finance system reform that could fundamentally alter their business models and market position. Changes in Congressional oversight, FHFA regulatory requirements, or housing policy priorities could require significant operational adjustments or strategic repositioning. The mortgage industry’s cyclical nature and sensitivity to interest rate movements create additional market risks that could affect the company’s financial performance and credit quality metrics during economic downturns.

Sources

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